| Mon 29 Nov 2010, 7:06 | | GDO - Gold One International Limited - Gold One production guidance and |
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GDO
GDO
GDO - Gold One International Limited - Gold One production guidance and
operational update
Gold One International Limited
Registered in Western Australia under the Corporations Act, 2001 (Cth)
Registration number ACN: 094 265 746
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO
OTCQX International: GLDZY
ISIN: AU000000GDO5
("Gold One" or the "company")
GOLD ONE PRODUCTION GUIDANCE AND OPERATIONAL UPDATE
HIGHLIGHTS
- Production guidance of 120,000 gold ounces confirmed for 2011
- Further production growth in 2012 confirmed with production guidance of
150,000 gold ounces
- Modder East cash cost guidance of US$417 per ounce confirmed for 2011
- Gold One remains on track for 20,000-22,000 ounces of gold production for
the December 2010 quarter
- Deflections for exploration boreholes DD68 and DD69 at Modder East
intersect gold at 275 grams per tonne and 24 grams per tonne over a 1 m
stoping width respectively, confirming original high grade gold
intersections
- Updated gold resources have been completed for Modder East and Ventersburg
and are currently being audited by SRK Consulting, with this review
anticipated to be completed in early December
For the release with pictures and schematics, please refer to the company`s
website hosted at www.gold1.co.za
1 Production Guidance
Gold One is pleased to provide its gold production guidance for 2011 of 120,000
ounces. The company anticipates improving on current annualised levels of 90,000
ounces, further growing its production profile during 2011 as outlined below.
- March quarter - 25,000 ounces
- June quarter - 28,000 ounces
- September quarter - 34,000 ounces
- December quarter - 33,000 ounces (traditionally a weaker quarter as effects
of the festive break are taken into account).
Gold One anticipates reaching its steady state target of 150,000 ounces during
the 2012 financial year.
Cash costs are forecast to average US$417 per ounce for 2011. Capital
expenditure for Modder East for the year is expected to be US$42-million,
equating to a capital cost of US$350 per ounce for 2011. Capital costs over the
life of the mine remain unchanged at approximately US$100 per ounce. Included in
the total capital cost is US$21-million of development capital. Total costs
will therefore be US$767 per ounce.
Gold One is expecting earnings of US$59-million in 2011, based on consensus
broker views of the gold price and exchange rates (US$1,234 per ounce and
ZAR7.69/US$1, respectively) after an amortisation cost of US$17-million based on
the current published Modder East reserve and mine plan. With 806.9-million
shares in issue, Gold One forecasts US$0.07 earnings per share. All costs take
into account latest real prices for goods and services, the anticipated wage
increase as negotiated in April of this year, and inflation rate forecasts of
5%.
Gold One President and Chief Executive Officer Neal Froneman commented: "The
extensive planning and budgeting process that has been completed at Modder East
has incorporated experience gained over the past 18 months of production,
providing a confident growth plan for the next 24 months. Gold One already has
the lowest cash costs out of South African producers, which is all the more
pleasing as it is being achieved at only 30% of designed tonnage throughput.
This positions the company to be extremely competitive by international
standards, and to deliver strong cash flows from operations over the coming
years as production continues to ramp up."
2 Operational Update
2.1 Safety
Gold One continues to have an excellent safety performance with a progressive
lost-time injury frequency rate for the 2010 year of 0.46 per 200,000 hours,
well below the Australian benchmark of 1, against which Gold One rates itself.
2.2 Fourth Quarter 2010 Production
Production for the December 2010 quarter is on track and in line with the
forecast of 20,000-22,000 ounces. Production during the fourth quarter to 21
November 2010 has so far totalled 11,887 ounces.
At the beginning of the 2010 fourth quarter, mining was being undertaken on a
total of 37 panels. This increased to 40 panels by the end of October and
during this month a further 4 panels have been equipped and are coming into
production. Of the 44 panels now being mined, approximately one-third are still
at an early ledging stage (new faces which are planned at lower production
levels while being established) and production levels from these panels are
anticipated to increase during December 2010 and January 2011.
The continued build up in mining panels as well as increasingly established
mining teams in the North 2 production area are ensuring continued improvement
in production rates. The total area mined during November will be in excess of
7,000 m2, an improvement of approximately 25% compared to the 5,660 m2 mined in
September. As a result, the average tonnage treated from Modder East on a daily
basis increased to in excess of 1,200 tonnes per day during November. Recovered
grades remained steady having averaged 6.80 grams per tonne for Modder East
during October.
Development rates for the quarter to date have been maintained at between 400 m
and 450 m per month. As discussed in this year`s report for the third quarter,
development prioritisation has been on opening up additional reef sections to
support the continued ramp up in production levels. With this having been
successfully achieved, development focus is now shifting to off-reef
infrastructure development (as can be seen from the November development figures
forecast shown in the graph below - for the release with pictures and
schematics, please refer to the company`s website hosted at www.gold1.co.za),
which is required to support the medium and longer term production build up and
ultimately to also provide flexibility once steady state production levels have
been attained.
A significant advancement in attaining increased levels of development has been
the introduction of the first 50-tonne payload dump truck (compared to the 30-
tonne payload trucks which are being utilised currently). The new 50-tonne
payload dump truck was commissioned on 17 November and has been committed to
tramming development rock from the primary off-reef development ends. This
initiative has allowed for enhanced efficiency of rock removal from blasted
development ends, thus facilitating regular blasting cycles.
An internal rock pass arrangement will also be completed during December. This
system will minimise the double handling of blasted rock and thus further
enhance efficiencies associated with off-reef development.
Despite the increased throughput in the Modder East plant, excellent
metallurgical recoveries have been maintained between 95% and 96%.
Commissioning of the gravity circuit commenced during November and is
anticipated to be completed during December.
CEO Neal Froneman commented: "Although it took longer than anticipated to
establish mining in the new Raise Line 2 area, I am delighted in the quantum
increase in production since September 2010. The continued build up of gold
production and consistent metallurgical recovery demonstrate the positive, low
risk fundamentals of Modder East and firmly position the company to continue
this growth into 2011. Importantly, Modder East has achieved this growth with
an impeccable safety record."
3 Resources and Reserves and Modder East Exploration Drilling Results
As highlighted in an announcement released on 10 November 2010, Gold One has
reported on exploration drillholes DD68 and DD69. DD68 has gold grades of 177.1
grams per tonne over a channel thickness (true thickness) of 72 cm, equating to
127.2 grams per tonne over a 1 m mining width. DD69 has gold grades of 37.3
grams per tonne over 56 cm, equating to 20.9 grams per tonne over a 1 m mining
width.
In addition to the original intersections detailed above, a further deflection
for both DD68 and DD69 has been drilled. Gold One is pleased to advise that the
deflection from borehole DD68 intersected 358.9 grams per tonne over a channel
thickness (true thickness) of 77 cm, equating to 275.3 grams per tonne over a 1
m mining width. The DD69 deflection contained 44.1 grams per tonne over 55 cm,
equating to 24.1 grams per tonne over a 1 m mining width (refer to table below).
The announcement released on 10 November 2010 and the September 2010 quarterly
report provide further information and results regarding the 2010 Modder East
exploration drilling programme.
BH_ID Reef Depth Dip Corrected
Intersected
(m) Channel Grams cm.g/t Grams per
Thickness per Tonne over
(cm)1 Tonne2 100 cm Mining
Width3
DD68_D0 BPLZ 262.29 72 177.14 12,723 127.23
Channel 263.01 553 0.59 328
Facies
DD68_D1 BPLZ 261.98 77 358.90 27,530 275.30
Channel 262.75 412 1.14 471
Facies
DD69_D0 BPLZ 261.89 56 37.32 2,085 20.85
Channel 262.45 427 6.00 2,563
Facies
DD69_D1 BPLZ 263.19 55 44.10 2,412 24.12
Channel 263.74 422 5.15 2,173
Facies
1 Channel thickness represents the true, dip corrected thickness of the
BPLZ/Channel Facies, rounded off to the nearest centimetre. Dip corrections are
undertaken based on dip measurements from core bedding angles, which typically
vary between 1 and 4 degrees.
2 Represents the average grade over the true thickness of the total
BPLZ/Channel Facies calculated using a weighted average of assayed grade from
individual samples over the total channel thickness (individual sample lengths
are typically between 15 cm and 30 cm).
3 Represents the average grade over a mining thickness of 100 cm, diluted at
0.0 grams per tonne. Resources are determined and quoted over a minimum 100 cm
mining cut.
Updated resources have been completed for Modder East and Ventersburg and are
currently being audited by SRK Consulting. The SRK auditing process is
anticipated to be completed in early December 2010. At Modder East, the
associated reserves and mine plan have also been updated on the basis of the new
resources. As described in this year`s September quarterly report, the results
of DD68 and DD69 have been received only recently, and such will not be
incorporated into the upcoming resource estimate. The results have, however,
been utilised to complete an updated geological and associated exploration
model, which has formed the basis of a continued exploration programme in the
north-eastern areas of Modder East. Mining in this area is only scheduled for
2013 and as such this drill programme will commence in January 2011. Once the
shoreline extension in this area has been definitively explored and modelled;
these findings will be incorporated into existing resource estimates and
associated reserves.
CEO Neal Froneman commented: "The confirmation of the high grade intersections
in our most recent boreholes provide further evidence of an extension to the
high grade Shoreline Facies in the north-eastern areas of Modder East. This
drilling has further confirmed the high quality and the continuous nature of the
Black Reef orebody that underpins our flagship mine."
*September quarterly report can be obtained from www.gold1.co.za.
Issued by Gold One International Limited
www.gold1.co.za
Parktown, Johannesburg
29 November 2010
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
JSE Sponsor
For further information contact:
Neal Froneman Ilja Graulich
President and CEO Investor Relations
+27 11 726 1047 (office) +27 11 726 1047 (office)
+27 83 628 0226 (mobile) +27 83 604 0820 (mobile)
neal.froneman@gold1.co.za ilja.graulich@gold1.co.za
Carol Smith Derek Besier
Investor Relations Farrington National Sydney
+27 11 726 1047 (office) +61 2 9332 4448 (office)
+27 82 338 2228 (mobile) +61 421 768 224 (mobile)
carol.smith@gold1.co.za derek.besier@farrington.com.au
About Gold One
Gold One is a gold producer listed on the financial markets operated by the ASX
Limited and the JSE Limited, issuer code GDO. Its flagship operation is the
newly built shallow Modder East mine on the East Rand, some 30 km from
Johannesburg.
Modder East is the first new mine to be built in the region in 28 years and
distinguishes itself from most of the other gold mines in South Africa owing to
its shallow nature (300 m to 500 m below surface). To date Modder East has
provided direct employment opportunities for over 1,100 people. Gold One also
owns the nearby existing Sub Nigel mine, which is used primarily as a training
centre in the build-up of Modder East to full production. Gold One`s other
projects and targets include Ventersburg in the Free State Goldfields, the Tulo
concession in Mozambique and the Etendeka greenfield project in Namibia. Gold
One has an issued share capital of 806,875,987 shares.
This news release does not constitute investment advice. Neither this news
release nor the information contained in it constitutes an offer, invitation,
solicitation or recommendation in relation to the purchase or sale of securities
in any jurisdiction.
FORWARD-LOOKING STATEMENT
This release includes certain "forward-looking statements" and "forward-looking
information". All statements other than statements of historical fact included
in this release including, without limitation, statements regarding future plans
and objectives of Gold One are forward-looking statements (or forward-looking
information) that involve various risks, assumptions and uncertainties. There
can be no assurance that such statements will prove to be accurate and actual
values, results and future events could differ materially from those anticipated
in such statements. Important factors could cause actual results to differ
materially from Gold One`s expectations. Such factors include, among others, the
actual results of exploration activities, actual results of reclamation
activities, the estimation or realization of mineral reserves and resources, the
timing and amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of Modder East and new
deposits, availability of capital required to place Gold One`s properties into
production, the ability to obtain or maintain a listing in South Africa,
Australia, Europe or North America, conclusions of economic evaluations, changes
in project parameters as plans continue to be refined, future prices of gold and
other commodities, possible variations in ore grade or recovery rates, failure
of plant, equipment or processes to operate as anticipated, accidents, labour
disputes and other risks of the mining industry, delays in obtaining
governmental approvals, political risks, permits or financing or in the
completion of development or construction activities, economic and financial
market conditions, Gold One`s hedging practices, currency fluctuations, title
disputes or claims limitations on insurance coverage. Although Gold One has
attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as
anticipated, estimated or intended.
Any forward-looking statements in this release speak only at the time of issue.
There can be no assurance that such statements will prove to be accurate as
actual values, results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Gold One does not undertake to update
any forward-looking statements that are included herein, or revise any changes
in events, conditions or circumstances on which any such statement is based,
except in accordance with applicable securities laws and stock exchange listing
requirements.
COMPETENT PERSON
The information in this release that relates to exploration results, mineral
resources or ore reserves is based on information compiled by Dr Richard
Stewart, who has a doctorate in geology and who is a professional natural
scientist registered with the South African Council for Natural Scientific
Professions (SACNASP), membership number 400051/04. Dr Stewart is also a member
of the Geological Society of South Africa (GSSA) and the vice president of
geology for Gold One, with which he is a full-time employee. He has 10 years`
experience which is relevant to the style of mineralisation and type of deposit
under consideration, and to the activity which he is undertaking, to qualify as
a Competent Person for the purposes of both the 2004 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(JORC Code) and the 2007 Edition of the South African Code for Reporting of
Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code). Dr
Stewart consents to the inclusion in this release of the matters based on
information compiled by Gold One employees and it`s consultants in the form and
context in which they appear. Further information on Gold One`s resource
statement is available in the pre-listing statement of Gold One International
Limited issued on 19 December 2008 and in the resource statements released by
Gold One on the Stock Exchange News Service (SENS) on 11 and 13 October 2010
concerning the company`s Megamine and Goliath Gold Mining Limited respectively.
Date: 29/11/2010 07:06:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
